Suppose we have a credit card company that sets the due date every 1st month. If its annual interest rate is 24%, what will be the finance charge (interest) and outstanding balance on Dec 01?
The ADB in this credit card for the November billing period is PhP 14,422.07.
So the finance charge for this billing period would be:
Monthly Interest = ADB x Monthly Rate
= 14,422.07 (0.02)
= 288.44
So the outstanding balance (OS) for the next billing period is
OS = Last Daily Balance + Finance Charge
= 1,607.80 + 288.44
= 1,896.24
important question: On the same credit card, for December, the customer plans
to purchase on Dec 05 an item worth PHP 15,000 and make periodic
payments of PhP 4,000 every Monday thereafter. What will be the O/S
Balance on January 01, 2021?
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